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April 23, 2009

Euro cash hoarding spiked in final quarter

by Sam Savage

The European Central Bank said demand for the euro surged in the final quarter of 2008 as people hoarded 100- and 500-euro banknotes.

The demand for cash peaked in the first two weeks of October, the bank said. During that time, the demand for the euro surged to $45 billion to $52 billion -- a hefty amount considering the value of euro notes in circulation amounted to $996 billion at the end of the year, The New York Times reported Thursday.

A 100-euro banknote was worth $130.59 Thursday. A 500-euro note was worth $652.99. The bank said the cash was to a large extent used for hoarding, the Times reported.